The world’s second-largest clothing retailer, Hennes & Mauritz — better known as H&M — is making a major move in regards to employee salaries. The company has announced that it will pay a fair “living wage” to some 850,000 textile workers by 2018, saying governments in the targeted countries were acting too slowly, reports The Huffington Post.
“We believe that the wage development, driven by for example governments in some countries, is taking too long, so we want to take further action and encourage the whole industry to follow,” H&M said in a statement on its website.
Most of H&M’s garments are made in Asian factories, particularly Bangladesh. A factory collapse in Bangladesh in April killed almost 1,130 people and pressure on big brands to improve the working conditions of those manufacturing clothes for the West.
Although H&M did not source from that factory, the firm was the first to sign a Europe-led safety pact for Bangladesh garment factories following the collapse. H&M also urged Bangladesh and Cambodia to raise the minimum wage and revise it annually.
In recent weeks, violent protests over pay have forced the closure of hundreds of Bangladeshi garment factories even though factory owners have already agreed to a proposed 77 percent hike in the minimum wage.
“Rock bottom wages and trade deals have made Bangladesh’s garments sector a $22 billion industry that accounts for four-fifths of exports, supplying retailers such as Wal-Mart Stores Inc, and Primark as well as H&M,” reports the HuffPo.
About 3.6 million of Bangladesh’s 155 million people are employed by the clothing industry; it is the world’s second-largest garments exporter behind China. Around 60 percent of those garments go to Europe and 23 percent to the United States.
According to H&M, it would support factory owners to create pay structures that enable a fair living wage in two model factories in Bangladesh and one in Cambodia in 2014. After this H&M will expand the model to the 750 factories it works with by 2018.
H&M has said it wants wages to be negotiated annually and reviewed by democratically elected trade unions or worker representatives.
“We are willing to pay more so that the supplier can pay higher wages,” H&M said. “We believe that our purchasing practices will lead to better efficiency and productivity.”